Achaogen
Mar 16, 2015

Achaogen Announces Fourth Quarter and Full Year 2014 Results

SOUTH SAN FRANCISCO, Calif., March 16, 2015 (GLOBE NEWSWIRE) -- Achaogen, Inc. (Nasdaq:AKAO), a clinical-stage biopharmaceutical company developing novel antibacterials to treat multi-drug resistant (MDR) gram-negative infections, today reported financial results for the quarter and year ended December 31, 2014.

During the fourth quarter, the Company remained focused on advancing the Phase 3 CARE (Combating Antibiotic Resistant Enterobacteriaceae) trial for plazomicin, Achaogen's lead product for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). The Company has been exploring strategies to improve patient recruitment and remains in discussions with the US Food and Drug Administration (FDA) regarding potential modifications to the study design as well as additional clinical trials that could support and, possibly, facilitate regulatory filings for plazomicin. The Company currently expects to provide an update on its development plans for plazomicin by early in the second quarter of 2015.

"The past year has been important on multiple fronts, highlighted by our transition to being a public company, initiation of a Phase 3 trial to evaluate plazomicin, and participation in key legislative initiatives addressing the public health threat of antibiotic-resistant bacterial pathogens. As we head into 2015, I believe that the company is well positioned to become a worldwide leader in the antibiotic space," commented Dr. Kenneth Hillan, Chief Executive Officer of Achaogen.

Highlights for 2014

Summary Financial Results for the Quarter and Year Ended December 31, 2014

Cash, cash equivalents and short-term investments totaled $63.7 million at December 31, 2014 compared to $72.0 million at September 30, 2014, decreasing as a result of operating losses and payment of a $4.0 million development milestone license fee which was accrued as expense in September 2014.

Revenues for the full year 2014 totaled $20.0 million, as compared to $18.5 million in 2013. Fourth quarter 2014 revenues were $4.3 million, compared to $6.2 million for the comparable quarter of 2013. Achaogen derived all of its revenue from funding provided under U.S. government contracts in connection with the development of product candidates. Revenue under government contracts increased due to increased spending on Achaogen's ongoing Phase 3 CARE trial of plazomicin.

Research and development (R&D) expenses for the years ended December 31, 2014 and 2013 were $30.1 million and $23.5 million, respectively. For the fourth quarter of 2014, R&D expenses were $6.6 million, compared to $6.8 million for the comparable quarter of 2013. Increased costs for 2014 were primarily attributable to increased activities on the ongoing Phase 3 trial of plazomicin, higher personnel-related expenses, and a $4.0 million development milestone license fee upon dosing the first patient in the Company's ongoing Phase 3 trial of plazomicin. This $4.0 million milestone fee was paid in October.

General and administrative (G&A) expenses for the years ended December 31, 2014 and 2013 were $9.6 million and $7.0 million, respectively. For the fourth quarter of 2014, G&A expenses were $2.5 million, compared to $1.6 million for the comparable quarter of 2013. Increased costs for 2014 and the quarter ended December 31, 2014 were primarily attributable to higher personnel-related costs including stock-based compensation expenses and increased costs associated with being a public company.

Net loss for the year ended December 31, 2014 was $20.2 million, compared to $13.1 million for the same period of 2013. Net loss in the fourth quarter of 2014 was $4.9 million, compared to a net loss of $2.5 million for the comparable quarter of 2013.

About Achaogen

Achaogen is a clinical-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of novel antibacterials to treat MDR gram-negative infections. Achaogen is developing plazomicin, Achaogen's lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including CRE. Through the Special Protocol Assessment procedure, the U.S. Food and Drug Administration has agreed that the design and planned analyses of Achaogen's Phase 3 CARE trial adequately address objectives in support of a New Drug Application.  Achaogen's plazomicin program is funded in part with a contract from the Biomedical Advanced Research and Development Authority. Plazomicin is the first clinical candidate from Achaogen's gram-negative antibiotic discovery engine, and Achaogen has other programs in early and late preclinical stages focused on other MDR gram-negative infections.

Forward Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical facts contained in this press release are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including Achaogen's expectations regarding the enrollment and success of its Phase 3 trial for plazomicin, Achaogen's ability to modify the current Phase 3 trial of plazomicin or to design and complete additional clinical trials of plazomicin that could support regulatory filings for plazomicin, Achaogen's ability to provide clinical evidence of the overall survival superiority of plazomicin versus colistin for life-threatening bloodstream infections and pneumonia due to CRE, Achaogen's ability to become a leading anti-infective company, and Achaogen's ability to discover, develop and commercialize novel antibacterials to treat MDR gram-negative infections. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause Achaogen's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the preclinical and clinical development process; specific risks related to the Phase 3 trial of plazomicin, including the lack of a prior clinical trial in patients with CRE infections and challenges in enrolling an adequate number of patients with rare infections; the risk of failure to successfully validate, develop and obtain regulatory clearance or approval for the in vitro diagnostic (IVD) assay for plazomicin; the risks and uncertainties of the regulatory approval process; the risks and uncertainties of commercialization and gaining market acceptance; the risk that bacteria may evolve resistance to plazomicin; Achaogen's dependence on ARK Diagnostics, Inc. to develop and manufacture the IVD assay for plazomicin; risks and uncertainties as to Achaogen's ability to raise additional capital to support the development of plazomicin and its other programs; uncertainties regarding the availability of adequate third-party coverage and reimbursement for newly approved products; Achaogen's reliance on third parties to conduct certain preclinical studies and all of its clinical trials; Achaogen's reliance on third-party contract manufacturing organizations to manufacture and supply its product candidates and certain raw materials used in the production thereof; Achaogen's dependence on its Chief Executive Officer; risks and uncertainties related to the acceptance of government funding for certain of Achaogen's programs, including the risk that the Biomedical Advanced Research and Development Authority could terminate Achaogen's contract for the funding of the plazomicin development program; risk of third party claims alleging infringement of patents and proprietary rights or seeking to invalidate Achaogen's patents or proprietary rights; and the risk that Achaogen's proprietary rights may be insufficient to protect its technologies and product candidates. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Achaogen's business in general, see Achaogen's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the Securities and Exchange Commission on March 16, 2015. Achaogen does not plan to publicly update or revise any forward-looking statements contained in this press release, whether as a result of any new information, future events, changed circumstances or otherwise.

 
 
Achaogen, Inc.
Condensed Consolidated Statements of Operations
(in thousands except share and per share data)
(Unaudited)
         
  Three Months Ended Dec 31, Year Ended Dec 31,
  2014 2013 2014 2013
         
Contract revenue  $ 4,259  $ 6,192  $ 19,970  $ 18,512
Operating expenses:        
Research and development  6,632  6,799  30,110  23,484
General and administrative  2,508  1,574  9,646  6,992
Total operating expenses  9,140  8,373  39,756  30,476
         
Loss from operations  (4,881)  (2,181)  (19,786)  (11,964)
         
Interest expense  --  (227)  (397)  (1,331)
Other income (expense), net  27  (78)  7  183
         
Net loss  $ (4,854)  $ (2,486)  $ (20,176)  $ (13,112)
         
Basic and diluted net loss per common share  $ (0.27)  $ (6.33)  $ (1.42)  $ (33.83)
Weighted-average common shares outstanding used to        
calculate basic and diluted net loss per common share  17,785,923  392,844  14,210,098  387,547
 
 
Achaogen, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
     
  December 31, December 31,
  2014 2013
     
Assets    
Current assets:    
Cash and cash equivalents  $ 18,881  $ 10,738
Short-term investments  44,798  --
Contracts receivable  5,234  7,230
Prepaids and other current assets  520  1,873
     
Total current assets  69,433  19,841
Property and equipment, net  725  743
Restricted cash  127  127
Deposit and other assets  37  47
     
Total assets  $ 70,322  $ 20,758
     
Liabilities, convertible preferred stock, and stockholders' equity (deficit )    
Current liabilities:    
Accounts payable  $ 2,122  $ 2,923
Accrued liabilities  3,266  3,004
Notes payable, current portion  --  4,989
Other current liabilities  128  73
Total current liabilities  5,516  10,989
     
Deferred rent  193  125
Notes payable, noncurrent portion  --  1,698
Other long-term liabilities  --  244
Total liabilities  5,709  13,056
     
Convertible preferred stock  --  132,278
     
Stockholders' equity (deficit)  64,613  (124,576)
Total liabilities, convertible preferred stock, and stockholders' equity (deficit)  $ 70,322  $ 20,758
CONTACT: Candice Knoll

         Blueprint Life Science Group

         415.375.3340 Ext. 105

         cknoll@bplifescience.com